July 14, 2024

Burgeoning Legalization Of Cannabis To Drive Growth Of The Cannabis Testing Market

Market Overview:

The cannabis testing market consists of products and services that help ensure cannabis plants and cannabis-derived products meet regulatory standards for safety, potency and consistency. Products include analytical instruments, assays, kits and reagents that allow for analytical testing, such as quantitative or qualitative analysis of THC, CBD and residual solvents. Analytical testing requirements vary by jurisdiction but generally involve microbial, residual solvent screening, heavy metal and pesticide analysis. Testing provides assurance of product quality and helps address safety issues as more areas legalize medical and recreational cannabis use. It is a necessary step to implement consumer protection regulations and allow for tracking of cannabis products from seed to sale.

Market Key Trends:

One of the key trends boosting demand in the cannabis testing market is the ongoing legalization of medical and recreational cannabis across Canada and several US states. As of 2022, over 38 countries have legalized medical cannabis use while 18 US states and Washington DC have legalized recreational marijuana. This expansion is bringing more commercial cultivators and product manufacturers into the legal supply chain who are required to test cannabis batches for quality, purity and potency. Another major trend is the development of novel testing methods and technologies with advanced capabilities. Companies are investing in portable testing devices, chromatography-mass spectrometry instruments, DNA-based identification systems and genetic analytics to handle the increasing volume of testing required by the industry. Mobile labs are also growing in popularity to enable on-site testing for cultivators and retailers. Such innovation is helping drive consistent growth across the cannabis testing market.
Porter’s Analysis

Threat of new entrants: Low cost of entry and availability of advanced testing technologies pose high threat for new entrants. However, issues related to regulations and licensing increase entry barriers.

Bargaining power of buyers: Large customers like dispensaries and producers have significant bargaining power due to their bulk buying capacity. Switching costs for buyers are also low.

Bargaining power of suppliers: Suppliers of cannabis testing instruments and software have moderate power. Suppliers can impact prices but availability of substitute options prevents suppliers from exploiting their power.

Threat of new substitutes: Alternative testing methods pose substitution threat. However, dedicated cannabis testing with customized approaches and testing all required compliance parameters reduce impact of substitutes.

Competitive rivalry: Numerous testing laboratories compete intensely on quality certifications, testing capabilities, regulatory compliance and quick TAT. Price competition is also intense to gain higher market share.

Key Takeaways

The Global Cannabis Testing Market Demand  is expected to witness high growth, exhibiting CAGR of 22 % over the forecast period, due to increasing legalization of medical and recreational cannabis across regions. North America dominates the market currently due to large patient pool and availability of testing facilities in Canada and U.S. states where cannabis is legalized.

The North America region accounts for the largest share in the cannabis testing market owing to increasing number of cannabis dispensaries and growing cultivation facilities in the U.S. and Canada. Growing legalization of cannabis across states is further expected to drive the regional market during the forecast period.

Key players operating in the Cannabis Testing Market are Abko Labs, ACT Laboratories, BelCosta Labs, CDX Analytics, Digipath, LGC, Medicinal Genomics, SGS, Steep Hill and Tentamus. Key players are focusing on expanding their service capabilities and geographical presence through partnerships and acquisitions to strengthen their market position.

Note:

1.       Source: Coherent Market Insights, Public sources, Desk research

2.       We have leveraged AI tools to mine information and compile it